By David M. Greenwald
Davis, CA – When HCD rejected the city’s housing element for failure to comply with State Housing Law, city staff worked diligently with the agency to revise the plan. At this point, the city believes that the resubmitted Housing Element is sufficient to gain approval from HCD.
One of the key changes during this RHNA cycle is that the jurisdiction cannot simply show sites on a map, they must have “realistic” and “demonstrated” potential for redevelopment during the planning period in order to meet the housing needs.
I remain considerably skeptical on a number of points made by the city about the viability of specific sites.
For instance, and I have pointed this out a number of times, the city is relying very heavily on the downtown to fulfill both its market rate and affordable housing needs. My problem with relying on the downtown is that the proforma presented pre-COVID showed that any projects had to be dense and for-sale in order to pencil out, and the market has gotten worse, while construction and land fees have only increased since then.
More skeptically is whether the projects could also contain affordable housing—83 of the required affordable units would be in the downtown.
Part of the problem as noted is that there is not a unitary landowner. Moreover, the money is not necessarily there for large scale redevelopments.
While the Hibbert site drew a lot of attention during the recent approval of the Downtown Plan, and it drew pushback, there is clear owner interest in redevelopment on that site.
We should be much more skeptical of the E Street Plaza.
The city explains, “The site is anticipated to become a central gathering place and key focal point of the Downtown. When completed, the E Street Plaza could support two mixed use buildings, up to seven stories in height, surrounding a large public plaza area.”
The city continues, “The City recognizes that several of the parcels would need to be consolidated and brought under common ownership in order to take on a project of this magnitude, either as one or two new large parcels.”
Is there the will and ability to do that and built a large redevelopment mixed use building there? And what are the chances that that could possibly occur by 2028 which is now only about five years from now?
The city in part justifies this belief on Lincoln40 which consolidated 11 parcels to build a large project and also that it has seen “redevelopment of commercial uses, including the Trackside Center, Paul’s Place, and University Commons projects, and anticipates that such trends will continue.”
While Paul’s Place was certainly a successful redevelopment, it was also an affordable housing project that utilized grants and non-profits to secure funding.
On the other hand, both Trackside, which is for sale, and University Commons, which has been scaled back to commercial only, suggest red flags when it comes to relying on infill projects to meet our immediate housing needs.
Someone criticized the HCD for requiring “the element must demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower-income housing units as projected for the site or unless the housing element describes other evidence to HCD that the site is adequate to accommodate lower-income housing.”
But if projects like Trackside and University Commons have been approved but not built, and other infill projects have languished, what justification is there to assume future projects like that at E Street are viable?
One of the big problems that the city faces is how to develop the required housing under the constraints of Measure J. The city both acknowledges this constraint and attempts to minimize it.
The city responded, “While Measure J adds costs, extends processing times, and has been used to halt development projects that would convert agricultural land to urban development, it is only a constraint to meeting housing needs if the city lacks sufficient infill housing sites.”
The city added, “Had DISC passed, the City would have substantially more units to help meet the sixth-cycle RHNA. The City will need to rezone additional sites to meet the RHNA…”
But that’s exactly the problem. DISC did not pass either time. Can the city rezone sufficient sites to meet the RHNA requirements?
I’m skeptical that they can. The city is running out of vacant infill sites. The financials of redevelopment especially without RDA money are bad and getting worse. And as we see even with viable sites where the owner wants to redevelop, there is significant neighborhood opposition to size and scale that would be economically viable.
So again, what leads the city to believe that they can develop these infill sites just because they can identify some of them on a map?
It appears that HCD is going to let the city go forward with this plan, but even the city manager has acknowledged that the next round is going to be a lot more difficult to meet without going to peripheral sites.